'Messaging to become a new kind of operating system for mobile internet'

We've collapsed everything under one brand - Hike. You'll see us drop the BSB (Bharti Softbank) brand very soon, too. In nine months, Kavin Mittal, the 27-year-old son of Bharti Airtel Chairman Sunil Bharti Mittal, will be leading a brand new Hike, one that will function more like a browser, with messaging as the main product, and micro apps like calling, coupons, news built in it. Speaking to ET’s Gulveen Aulakh, Kavin said six to 12 months from now will be the time when Hike will look for funds. He also said that having Softbank and Tiger as partners will help it get insights into what Chinese biggies such as Wechat are up to, which it can adopt. Edited excerpts.

How has Hike’s progress been?

From day one, we knew that this is going to be a 7-10 year journey. There’s a lot of work to be done. Phones have got cheaper and faster. But there are problems in memory, storage. As a result in India, the average number of apps people download is half the global average, and the churn is much higher. On top of that, you have a market that is completely dominant on 2G, which is a tricky network to build on. Out of a 200 million internet users, the good data users are 20%.

How many active users does Hike have?

The registered count is comfortably between 50-60 million, and the active count is 50% of that. We are exchanging 20 billion messages a month. People spend 140 minutes per week on Hike. People spend 200 minutes per week on WeChat in China. Hike is the sixth most used app in the country, but is the second biggest messaging app in the country (after Whatsapp).

Would there be a stripped down version of Hike?

It will not make sense to us right now, if you strip everything away, then you just become a simple messaging company which is not our strategy. We do talk about light version internally though.

What are you developing next for Hike?

We believe that messaging will become a new kind of operating system for mobile internet. For instance, we developed byte-sized news on the go, aggregated from different sources, in a micro-app, inside Hike. WhatsApp, Facebook have not done anything similar at all. We have cricket scores, we are launching Coupons very soon and a lot more. Going forward, you’ll see us build different kinds of micro-apps -- there might be 10,000 of them on Hike which you might not see, but they will jump up according to the context of conversation or user-permitted location tracking. All these are going to be foundation on Hike, 6-9 months down the line. Hike for iOS will come in three days, approvals are in the process, and Hike for Windows will come later.

You launched ‘calling’ in March after acquiring ZipPhone. How has it impacted your subscriber base?

The retention on VoIP is good, it’s still in beta, we will roll it out next month. We have not put emphasis on ‘calling’ yet, messaging is still first. We expect this to become much bigger in the next 3-4 months. The idea is to integrate calling as a micro-app with Hike, but messaging will dominate.

So do you need more funds?

We raised $85 million so far and want to raise another round, within six months to a year. The team is about 230 people in Bengaluru and Delhi now; we are planning to expand it by 1.5-2 times, and much higher growth.

Some of the valuations we hear aboutFlipkart,Snapdeal, etc -- are they over the top?

No doubt, it’s over the top, let’s be real. There is no doubt that these companies are billion-dollar businesses. But if the market collapses in six months from now, will they be able to hold on to those valuations? That is the most critical part.

What sort of interactions do you have withSoftbank?

We’ve collapsed everything under one brand -- Hike. You'll see us drop the BSB (Bharti Softbank) brand very soon too. We are three strong partners -- Bharti, Softbank and Tiger (Global). We have access to Alibaba, because Softbank has a big stake there. Also, Tiger has a lot of access in China, they’re into companies that are sitting on WeChat's messaging platform which is commerce.

What’s the revenue model for you?

WeChat makes about $5 billion a year in profit every year from QQ and Tencent because the ecosystem around messaging can be coupons, news, games and a lot of other stuff, and the business models for these micro-apps have already been established. So, messaging will always be a loss-weighter, should always be free – it’s what you build on top of it (that makes money).

And commerce is an integral part of that?

Yes. Coupons is commerce. We already have that on the platform…it’s been a small experiment in the past six months. Now we’re launching Coupons in a very big way by the mid-to-end of this month. We have 300 brands on board, online and offline.

Typically a business model like yours -- how much time does it take to break even?

Second half of next year, we’ll start looking at revenue and start trying to make money in the year after that --during first half of 2017.

How closely do you work with your father?

I see him once in a couple of weeks. We have a lot of arguments no doubt, but there’s always a lot to learn from someone who’s built a business like that.

You’re competing with your father’s business?

We have from day one, but over time, they have realised that we are actually helping them because we are the reason why people come on data. The fear (of cannibalization) has lessened now. Telcos once said that IMs should pay as they are using our infrastructure. We said let’s reverse the argument. we're driving data for you, people are paying you because we're on your platform, so why don't you give us a cut of your data. it’s absurd both ways. Everybody has an upside.

Sponsored Stories

Subscribe ETTelecom Newsletter

“There will be a new brand identity — work has started on it,” a senior consultant working on the merged company’s new identity said, speaking on the condition of anonymity due to non-disclosure agreements.